Many London boroughs are under pressure to meet tight funding envelopes. In order to maintain high quality services they are looking to redirect their budgets or just spend less. The casualties of this can often be technology programmes which can be seen as additional unnecessary expenditure on top of already tight budgets. 

In this blog, I discuss how technology can be about thinking creatively to meet tight budgets without negatively affecting the vital services that they provide to the millions of London residents. If London boroughs have further good practice to share, please get in contact too!  

The Fair Funding review points towards a bottom line that the delta between how much the councils receive and the amount they need to spend needs to shrink, with the ideal result being that the councils can meet all their obligations within their budget while providing high quality services to residents. 

This can be done in a number of ways, and cutting the budget is the default option when money is a problem for a borough. Although reducing services or quality levels by losing staff will save money, it will inevitably have an impact on the amount of services delivered or the quality of services delivered. This is a tough decision for boroughs to make. Although it can make sense on paper, as this approach  lowers immediate outgoings for the council, it can push problems elsewhere, leave residents’ needs unmet, and store up more expensive problems for the future. There are other creative alternatives which I will outline below.

1. Making existing processes more efficient. 

Efficiency is working out how much it costs to deliver a service and optimising it. This could mean streamlining existing processes, like removing unnecessary sign offs, data collection and storage, pushing more information to the user so they need less help when they contact the borough.

It can also mean analysing what technologies boroughs are using to deliver a service and replacing older, more expensive technologies with newer ones that might do more functions, at lower costs or reduce the need for manual intervention. Over time, technical debt builds up in services which are often plugged with humans retyping data between systems or other forms of duplications. Many boroughs have programmes of Robotic Process Automation (RPA) that introduce another system to replace the human linking between systems. Whilst this is often the right choice for a short-term fix, a longer term solution of replacing all three systems with a modern piece of technology can mean that significant savings can occur and may improve the quantity or quality of services provided to the residents. Realistic objectives to replace systems led by a borough’s IT and Digital leadership can, for a little investment upfront, get the borough’s business as usual costs down in the medium term.  

2. Enable new services that will generate new revenue.

This is about using the opportunities created by new technologies to make feasible what was previously infeasible and that customers would want to pay for. These new services can generate untapped revenue and provide a service that customers willingly pay for or generate new sources of income for the council and can reduce the need for further cuts. For instance, Westminster Council’s use of Google Street View and data on properties charged business rates to find bus advertising hoardings that were not paying business rates. Their work identified over £500,000 of extra revenue that the council could get after 10 days’ work.

Although there is a time and a place for just cutting costs, the other options create the opportunity of providing better services to residents and lowering costs for the council. 

Key to this is councils’ understanding the cost per delivery of each service they provide. Yet it appears very few councils have these figures to hand. Some may record the costs of the technology, but services are made of people, processes and technology. Without people and processes, the technology just won’t work or provide the benefits that they should. 

It is therefore important to get a holistic view across operational team costs, technology licence costs, infrastructure costs to work out how much each service costs to deliver per the number of users of that service to understand what transformations of that technology would be more effective. Creating a cost per service delivery / per user allows better benchmarking of your services, gives the vital data on where savings could be made and helps make decisions about transformation much easier to make. 

That segmentation of cost will also allow the next phase of questions to be answered, which relate to the associated costs of deploying new technology, processes and people: 

• Will you remove or create new bottlenecks? 
• Does the human team involved have capacity to deal with greater outputs caused by a machine? 
• Will replacement technology require new ways of working and refactoring of other software?
• Will anyone have to rekey information between systems? 

Software vendors will not often answer these questions as they do not have sight of council costs or are unaware of the processes or workflows that these systems are put into.

Case studies

At LOTI we are looking to use the case studies from London boroughs based on the options above to provide a playbook of case studies for London boroughs to choose from when addressing their budgets for next year. If you have a case study to share, please send it to us at contact@loti.london.